ABCTC’s journey, cup by cup: Examining factors for rapid growth

Abstract

India, which has traditionally been a tea loving country, is currently one of the fastest growing coffee markets in the world. The Indian Coffee Board estimates domestic coffee consumption to be around 97,000 tons in the year 2009 which is pegged to grow annually at a rate of 5-6%1. This growth has largely been attributed to the increasing popularity of trendy western-influenced coffee bars that have emerged across India in Tier I and Tier II cities. From being a traditional beverage consumed mainly in South India, coffee now has an international appeal with consumers still seen to be aspirational about the Café Culture. The coffee retail business in the country is estimated to be worth over Rs. 8 billion and can accommodate approximately 5000 cafes. The current count of around 1500 cafes leaves the market open for various players to clamour for a share in this promising and rapidly growing market. It is in this context that we aim to study the Amalgamated Bean Coffee Ltd. Co. (ABCTC) which currently owns the largest coffee retail chain in the country . With over a hundred years of experience in the coffee growing business, entrepreneur V. G. Siddhartha amalgamated and christened ABCTC in the year 1993 and the company which started off as an exporter of coffee is currently the second largest exporter in India. In 1996, ABCTC pioneered the ‘Café Culture’ and transformed coffee drinking into a high value experience. This was achieved by entering into the consumer foodservice industry and promoting one of the first branded coffee shops in India - the Café Coffee Day. Since then the company has grown by leaps and bounds and has sparked several innovative ventures to capture a stronghold in this industry, across the value chain. At present, ABCTC is fully integrated and spans all sectors involved in coffee trading. Its brand Coffee Day enjoys a significant market share in different parts of the value chain of the coffee industry in India. This study aspires to capture the significant changes in capabilities and the planning process that was employed by ABCTC in order to achieve such fast paced growth.